SAO PAULO, BRAZIL — Hot-runner manufacturer Mold-Masters Ltd. is spending at least US$4 million to open a manufacturing plant in Sumare, Brazil, its first in South America.
The plant, which will open in June, rounds out global production for the Georgetown, Ontario-based Mold-Masters, said President Jonathon Fischer. He was interviewed at Brasilplast 2001, held March 5-10 in Sao Paulo.
The Mold-Masters do Brasil Ltda. subsidiary will start making manifolds, hot half plates and some more-sophisticated components, and probably will expand to making complete hot-runner systems, he said.
"Our intention is, after we get going, it will be much like our German factory, in that it will be completely self-sufficient," to make entire hot runners, Fischer said.
The Brazilian plant will start with about 25 employees, like the Baden Baden, Germany, plant, which now has 130, he said. The plant is near Sao Paulo.
Brazil is part of a global expansion at Mold-Masters. The company opened a plant in Singapore in August and plans to focus on expanding its German operation, he said. The company also manufactures in South Carolina, Canada and Japan, and has a technical center in Detroit.
The Singapore plant has 20 employees, doing some manufacturing and assembling complete hot-runner systems with imported components, such as nozzles, from Canada.
Mold-Masters is not the first North American hot-runner manufacturer in Brazil — DME Co. has a long-standing partnership with Brazilian firm Polimold Industrial S/A, and an Incoe Corp. subsidiary began making some components two years ago.
"Mold-Masters realized we needed greater emphasis on the South American market," Fischer said. "We had seen that our end users were moving to South America."
Right now, South America is 5 percent of the privately held company's annual sales. Fischer predicts that will grow to 7-9 percent in five years and 15-20 percent in 10 years. Mold-Masters, which does not disclose sales, has about 1,000 employees worldwide.
Mold-Masters should see rapid expansion in the market, although not as rapid as in Asia, Fischer said.
One factor in setting up local production is that Mold-Masters faces duties and import costs equal to 58 percent of the product's final price, he said. But the primary reason that Mold-Masters wants to be local is so it can tailor its products to the South American market, Fischer said.
South American companies want reliable, easy-to-install systems, he said. Mold-Masters wants to serve the local market, not export.
"People don't come to South America to buy cheap and export," he said. "Asia gives them better prices. ... People are coming to South America to focus on the market."
Mold-Masters do Brasil will be headed by Afonso Celso Podadera, the company's first representative in Brazil and a former instructor at Brazil's national training institute. Mold-Masters also bought a small mold-repair shop owned by Podadera, Manuplast Industria de Moldes Para Termoplastico Ltda.
Mold-Masters has not decided what to do with Manuplast, Fischer said.